Knife Collecting as an Investment

I hope no one sees this discussion as a "fight". I'm looking at it as a learning experience.

Thanks to all who have posted so far.

I have been watching the blade for sale forum, and will be watching this one as well. Have been trying to see whose work is selling quickly and whose isn't. Have also been watching for sale by individual forum to see what guys are re-selling. I think I have identified a name or 2 whose knives sell quickly and are rarely being re-sold.
But there are, or seem to be, alot of knife makers who are well known but not part of the internet sale group. I suspect opportunities for successful knife investing are as great off the internet as on.
Most, not all, of the knives I see on the internet are "user" knives. Made for and priced for use. Some are fancier than others. These knives appeal to a large audience, both for use, and for collecting. All of the knives I have bought so far would be "user" knives.
The other knives are "Art". Made for, and priced as artwork.
I'm thinking I should also be investing in "art"
mt
 
A lot of the collectable or successful makers stay pretty busy making knives to order or have dealers ready to take anything they make so you won't likely see them selling on the forums. The forums can be a great way to watch the newcomers develop.

There is no quick and easy way to learn what you need to know to invest in knives. You need to do your homework and put in the time to learn. Go to the shows, meet the makers and collectors, see who is selling or buying what. Forums, books and magazines offer a ton of information although it's often somewhat biased.

Collectors buy what they like and when they decide to sell there is usually someone out there who shares their taste in knives. Guessing what others will like and buy a few years down the road is a whole different ballgame.
 
Hi James,

I wrote a book on knife collecting called "Custom Knife Buying Guide". The 7 questions are in there.

Those questions were developed over several years.

I suspect many other collectors have done the same thing.

My questions will serve you well. However, they are not the answer(s) by themselves.

As I wrote earlier, you want to invest in custom knives...Thousands of Hours of research and Tens of Thousands of dollars.

It is difficult which is why most people adopt the "I buy what I like" mind set. Followed by the "I don't care if I lose money on the knife...I bought what I liked and I enjoyed it".

I had the same mind set until I had spent about $10,000 on knives. Then I found I grew tired of taking a loss on every single knife I sold.

Your mileage may vary! :D
 
Hi Marten,

Yes, there are a lot of makers who are not active on the Internet. Many have learned the lesson in the earlier days of the Internet forums that there were many "experts" who knew how to build their knives better than they did. So instead of wasting time trying to straighten the "expert" out...they just didn't post.

Today most of the makers who do post do so to show pictures of their knives that are WIP or what they are bringing to a show (like the upcoming Blade Show) or just their newest knife...which more times than not shows up for sale on their website.

All of which is smart marketing.

The down side (from a information gathering perspective) is the next 10 posts (or more) are all the obligatory "Great Knife". Have you ever seen a post where someone wrote...wow, butt ugly knife and way over priced? More than a few of the knives posted fall into that category.

Collecting "art" knives is difficult...as "art" has a different meaning for each person. When I am judging at shows the "art" category is always the one that has the largest group of knives. This year at the Blade Show will be no different. I will have a huge selection to pick from. Anything from a hunter with an engraved brass bolster and dyed Giraffe bone scales to a jewel encrusted rapier!

Following the Internet for sale forums was more of a suggestion to train yourself as to what is selling and why or why not.

Most knives that aren't users get put into the Art Knife Category. In fact most of those are "presentation" knives. Also, price doesn't dictate of something is an "art" knife or not. Even at the Art Knife Invitational there are "users" on the table. Again that whole what is and isn't art.

The art knife category is without a doubt the most expensive to invest in and the most fickle of all the markets.

Good luck.
 
martentrapper said:
This is getting interesting.
The statement, "There are better forms of investing" I am sure is completely true. However, one of the rules of investing is diversity. I see knives as an area that holds promise. For the most part, I see knives that increase in value as a "tax free" investment.
I have a plan and a certain amount of money to spend each year. I plan to spend that amount each year for the next 10 years, maybe longer. Maybe not that long. However, as our economy recovers (if it recovers) the value of collectible items is likely to grow.

The question is not, "are knives a good investment"? I think the question is, "which knives are a good investment"?
One idea I had was to invest in knives of known makers who's age would make them likely to pass on in the next 10 or so years. The value of a known makers knives will likely increase noticeably once he passes on.
One question I have is how much will knives increase. I wonder if lower end customs will increase at a higher percentage than high end knives too valuable to actually be carried?
A high end 3000 dollar knife that increases 300 bucks only increases 10%. A low end user type knife that increases 300 bucks could be doubling in value.
Anyway, enjoying the dialog. Keep it coming!
MT
That is QUITE the collection, Mr. Jones. You have me thinking!
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Thank you MT.
I have utilized a collector/investor collecting philosophy developed during my many years collecting classic cars to obtain my custom knife collection with less investment than most would think. As both Les and I have stated, it takes considerable time and effort educating yourself to successfully invest in custom knives.

You can "buy the knives you like" and still maintain an impressive ROI on your collection over time.
 
Larry B. said:
With a time frame of 10yrs or longer you would be better off investing in a proven mutual fund with a track record. The average knife hobbiest doesn't have the connections or the savvy to make any real money investing in knives. For the most part the inner circle of knife people have it all worked out and they wont share it with any outsiders, that's for sure. Ever go to a knife show and notice all the whispering by people selling knives. Five different prices for five different people.

Talke it another step. I was on a makers list for almost 4 yrs. I don't mind that as much as I mind that during that 4yrs I saw a collector purchase about 10 knives from that maker which he proudly displayed on a forum. A few months later he sold them for double what he paid for it while I waited for my knife. That's the worst part of this hobby for me anyway.
Anyway good luck with whatever you invest in. As for me I will keep this in perspective and continue to enjoy the hobby.
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Larry, you bring up a related and very interested topic.

Knifemakers are businessmen (at least the successful ones are). So should they not show preferential treatment to collectors who promote them and purchase 6-10 knives per year over the collector who will purchase perhaps one knife?

Why is knifemaking any different from other businesses? The guy who frequents his favorite restaurant most gets the best reservation and table, the guy with the most miles gets the seat in first class on his favorite airline, the guy with the most hotel club points gets the best rooms at the best rates. Does a business who uses a particular vendor as there primary supplier get a better discount/price than a business who uses that vendor as a secondary supplier? Of course they do.

Though we may not like a maker bumping a collector up ahead of us or giving another collector a better price, it's just business.

Cultivating relationships with makers who are not only skillful knifemakers but GOOD businessmen is a major step in successful investing in custom knives.
 
Kevin Jones said:
Larry, you bring up a related and very interested topic.

Knife makers are businessmen (at least the successful ones are). So should they not show preferential treatment to collectors who promote them and purchase 6-10 knives per year over the collector who will purchase perhaps one knife?

Why is knife making any different from other businesses? The guy who frequents his favorite restaurant most gets the best reservation and table, the guy with the most miles gets the seat in first class on his favorite airline, the guy with the most hotel club points gets the best rooms at the best rates. Does a business who uses a particular vendor as there primary supplier get a better discount/price than a business who uses that vendor as a secondary supplier? Of course they do.

Though we may not like a maker bumping a collector up ahead of us or giving another collector a better price, it's just business.

Cultivating relationships with makers who are not only skillful knife makers but GOOD businessmen is a major step in successful investing in custom knives.
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In the beginning of my knife hobby I though the makers treated everyone the same and gave everyone the same opportunity to get one of their knives. How naive I was. A lot of makers start out like that but once they catch on they don't want to deal with the average hobbyist and only with people who they think can help them. Not all makers are like that, but quite a few are. I avoid those makers and will never kiss their ass to get one of their knives or will I overpay for one on the secondary market.

The knife making business on all ends is devious to say the least. I handle it by buying knives from up and coming makers who are just as good but practice fair business ethics. I also only buy from dealers I trust like Les Robertson who will always treat you fair and honestly.

Like I said in a prior post, BUYER BEWARE.
 
Larry B. said:
In the beginning of my knife hobby I though the makers treated everyone the same and gave everyone the same opportunity to get one of their knives. How naive I was. A lot of makers start out like that but once they catch on they don't want to deal with the average hobbyist and only with people who they think can help them. Not all makers are like that, but quite a few are. I avoid those makers and will never kiss their ass to get one of their knives or will I overpay for one on the secondary market.

The knife making business on all ends is devious to say the least. I handle it by buying knives from up and coming makers who are just as good but practice fair business ethics. I also only buy from dealers I trust like Les Robertson who will always treat you fair and honestly.

Like I said in a prior post, BUYER BEWARE.
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I agree in regard to the ass kissing and to an extent in overpaying for knives on the secondary market, however "overpaying" is not easily defined.
For example, has someone over paid if purchasing a knife on the secondary market for 10% over maker's price if another collector then offers them 20% over what they paid?
I define "overpaying" from a personnel perspective as paying more than market value.

I totally disagree with your bolded statement above. I find the custom knife community to a great extend (makers, dealers and collectors) to be very ethical and accommodating.
 
I said "The knife making business on all ends is devious to say the least."

Maybe I should of said to some extent. I also think Kevin you know what I mean when I say overpaying. I'm not talking about 10-20%.
 
HI Larry,

First, thank you for your kind words. :D

The knife making business on all ends is devious to say the least.
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By in large custom knives is not a "business". It is more of an amalgamation of a collectible with some business thrown in as more of a "tolerated" evil by most makers and collectors.

Over 90% of the makers out there are part timers. Most of those could not even come close to making a living through their knife making. As very few do make a living solely from their knife making.

As someone who does make their living in the custom knife market I can tell you it is very difficult.

As Kevin pointed out the majority of very successful knife makers are also very good businessmen...there is a correlation!

I think the advent of the Internet has really cleaned up the custom knife business. Those who are outright thieves get their names on numerous "Good Bad and Ugly" lists. This goes for makers, dealers and collectors.

Yes there are people out there who can and will take advantage of the custom knife buyers trusting nature. But that is true in just about any area of life.

Larry what I have learned over the years is that you have to understand that sometimes people are all too human...and will take the big pile of money put in front of them....regardless of who they owe what to.

Best thing to do is just walk away from that maker and find one of the thousands of other makers who can build a similar knife.

As well I also agree about kissing a makers ass to get a knife.

However, in fairness to the maker often times people only want a knife once they become very popular.

As well I agree with Kevin that those collectors who supported the makers on the way up...should be rewarded for their support.

I think you do bring up a good point about "buyer beware". Nothing wrong with doing some homework before you buy a knife.

The information is out there, spend an hour checking out the maker (any posts about him/her positive or negative). Search the forums and see if anyone is selling or has sold a similar knife. What was its retail price...what did it finally sell for...how long did it take to sell? Lots of "bumps"? Lots of "price drops"?

Regarding "Over Priced" in the after market.

Im going to split the difference between you and Kevin.

I agree with you that yes, there were knives out there with "Stupid Premiums"

I also agree with Kevin that it is a free market and given market conditions a 80% premium is what you should offer.

I have both been involved and seen a lot of transactions regarding the buying and selling of custom knives.

I have heard collectors say they got a bargain...I have heard them say later they got took. I have heard makers say they sold it "too cheap"

My response is always...did they hold a gun to your head...in another way threaten you or your family with physical violence?

The answer is always "no".

It is your money and your choice. If you think it is worth the price...buy it.

If not don't buy it. If you give it time there is a good chance that very knife will surface again.
 
Sage advice Les. I don't see a premium on the secondary market as overpaying because the buyer has a choice to pay it or not.

I have mixed feelings about buyers that supported a builder on the way up should be rewarded. For years I had been trying to get a knife from a certain well know builder. I got my name on his list five years ago, right before he closed his books. A couple of years later he said his computer died and he lost his order list. I could not even get him to return an e-mail confirming that I was still on his list. One specific collector always gets new pieces from the builder when noone else can. I asked him how he was able to get the knives. His reply - I pay 20% over what he is asking. Good business on the builders part but no one else has access to his knives, especially since he no longer accepts orders. Not fair? No, but such is life and the builder has to make a living. I do find it somewhat taints a hobby I really enjoy though.
 
HI MW,

A phenomenon of the forums is the "Love"!

The love is given and gotten to fellow forumites. Often times a knife is purchased merely to feel the "Love".

Some will announce they are getting the knife...and the get the "pre-love".

Then they post pictures of the knife when they get it...then the get the "Love" for owning the knife.

Then when they sell the knife...the get the "Out the Door Love"..something like.."Awesome knife Dude...wish I had the Money...or good luck with the sale".

Because of the "Love" there are those who are willing to pay a very high premium to get a knife.

However the last 18 months has slowed this overpaying for a knife to a large degree.

As for the 5 year wait list. The only person who knows what they are doing 5 years from now is someone who is on Death Row.

There are just to many knife makers to choose from to from.

When makers ask me about long waiting list I recommend at 18 months (no more than 2 years).

Primarily because after two years most makers no longer want to build the knives they were building 2 years ago. If you were a talented JS you are now probably a MS.

As well you have to keep up with a list. In that time frame you are going to get a lot of emails and phone calls...all taking you out of the shop. Then there are some makers that lose all their data. :D If they don't have a back up of client orders...how serious were they about filling them??

If you have a 5 year list many people who have been waiting years get annoyed when they see you set up at a show with knives for sale. Even though it is essential for the maker to do this. As a maker should do what they can to develop the next "generation" of buyers. This in turn helps the current buyers/collectors by maintaining or increasing the demand for that makers work.

Generally it is a no win situation for custom knife makers. If they support them who supported them...people complain. If they sell a knife at a show that was similar to someone's order....people complain. If they don't answer the 40th email over a 4 year period (No he hasn't started your knife yet)...people complain.

When a maker has no orders...they wish they did.

When a maker has orders....they wish they could build what they want again.

I look at a lot of the makers that I bought from early on that today are very sought after. I supported them, promoted their knives, on occasion I wrote articles about them in different magazines. Yes...I expect preferential treatment :D LOL

Even today I look for the up an coming makers. Those who are talented and just need suggestions and recommendations on which direction to take, materials to use, design elements and pricing input.

By in large those are the successful makers of the future...and perhaps your best opportunity for a good ROI!
 
mwalx30123 said:
Sage advice Les. I don't see a premium on the secondary market as overpaying because the buyer has a choice to pay it or not.

I have mixed feelings about buyers that supported a builder on the way up should be rewarded. For years I had been trying to get a knife from a certain well know builder. I got my name on his list five years ago, right before he closed his books. A couple of years later he said his computer died and he lost his order list. I could not even get him to return an e-mail confirming that I was still on his list. One specific collector always gets new pieces from the builder when noone else can. I asked him how he was able to get the knives. His reply - I pay 20% over what he is asking. Good business on the builders part but no one else has access to his knives, especially since he no longer accepts orders. Not fair? No, but such is life and the builder has to make a living. I do find it somewhat taints a hobby I really enjoy though.
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Go figure, you would think a long time supporting customer would pay less, not more.

I feel the most successful maker/collector relationship is one where both mutually benefit. The maker benefits from the collector's support, not just in buying knives but promoting the maker in the community. A maker can also benefit from a trusted and knowledgeable collector's counsel.

The Collector may benefit by having access to the maker's knives without the long waits and possibly even getting a price brake. Many collectors learn quite a bit about knives from the makers they support. Maker/collector relationship can be a win/win situation.

Every collector makes a conscious decision as to which knives they acquire and how they go about acquiring them. The correct decisions in my opinion are the ones that result in the most enjoyment for the individual collector.
To some collectors it's all about the knives and to others its more about the makers/knives and relationships. There are both positives and negatives associated with each philosophy. The possible negitives of "I only buying what I like" and/or "its only about the knives" may be losing money on your knives upon sale and long waits from makers.

If I were a knifemaker I would supply an "order process" document with each knife order.
The document would give a best guess estimate of the particular customer's delivery time based on current back-log, type/style knife ordered, production allocations and current market conditions.

It would also communicate that special orders are only a part of a maker's total offering of knives to his/her customers. It would further state that his/her production of knives are alloted to special orders, preferred or long time customers, knife shows and special project such as promotional and benefit knives.
I believe if knifemakers did this their collectors would have a better understanding of the maker's business and the order process, thus more satisfied customers. Lack of communication by both maker and collector is probably the root cause of most conflict and issues.

Now having said the above, the maker would first have to have and maintain a reliable order list. In my opinion, there's quite a few makers out there who couldn't tell you who are due there next five order spots if their lives depended on it.
 
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martentrapper said:
...Thinking of using knives as another source of investing for the future.
MT
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A lot of good information in this thread! I'm a collector not an investor but I offer you this... invest in what appeals to you, you may be staring at it for a very long time. ;) As a stamp buyer told me when I sold my stamp collection... (rough catalog value of $100,000; I felt I could sell it for $20,000; he offered me $7,000) 'did the hobby offer you enjoyment?'
 
Clydetz said:
A lot of good information in this thread! I'm a collector not an investor but I offer you this... invest in what appeals to you, you may be staring at it for a very long time. ;) As a stamp buyer told me when I sold my stamp collection... (rough catalog value of $100,000; I felt I could sell it for $20,000; he offered me $7,000) 'did the hobby offer you enjoyment?'
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You are correct, some may be staring at their knives for a very long time, others will be maintaining a 10-25% ROI on their knives long term while enjoying every minute of it.

My collecting/investing seminars include a list of 10 guidelines for selling custom knives. Your stamp collector broke # 7, which is "sell knives individually in multiple places and by multiple means whenever possible. Not in lots. For example, I wouldn't list 6 knives for sale on the same day on the same "for sale forum". This indicates a "Fire Sale" and buyers will expect discounts."

The savvy collector will be finished liquidating before anyone notices they have started.
 
Hi Clydetz,

Part of investing is to know when to sell. Long term is not always the best route to go...to many variables.

Everyone points to Loveless knives....they forget it wasn't until Loveless knives had been around for almost 40 years before they really took off.

Now, the slippage has begun in the after market...and will continue to do so except for those who have a knife actually made by Loveless.

This is why investing requires a different skill set than just collecting.
 
I agree with you Les. 2thumbs I am definitely a collector. The only thing I've tried my hand in investing in was the ponies. I used to keep track of every bet I made (+) or (-). To tell you the truth... my mother did better by betting $2 to win on #5 in every race! :D
 
Hey Les, remember in 1998 at a NY show you and Bob had about 2 dozen or so Onion speed safes for sale. The price was $475-$500. I bought a couple. A good investment would of been for me to buy them all or you to keep them all. Who knew than.:D
 
how about some input on collecting vintage production pocket knifes for investment, any thoughts? tips, advise..
 
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